After a brisk beginning for 2010, UK property prices are expected to level off by year’s end. While the upcoming election doesn’t appear to be a big market factor yet, the prospect of future fiscal belt-tightening looms, and spring could see real estate sales activity increase. See the following article from Property Wire for more on this.
There are early signs that the UK residential property market is having a buoyant start with the first price index for the year showing a rise of 0.4%.
The first week of the year saw a strong asking price rebound of 1.2%, reversing the fall of 0.9% in the previous week, according to the figures from Rightmove.
It says that the rise in the rest of the month in average asking prices and search activity sets a new record high and the lowest stock this century creates a window of opportunity for sellers.
Rightmove forecasts 0% price change in 2010, with sellers advised to take advantage of expected price rises before a post-election dip.
‘The rise in asking prices is an early indicator that new sellers in 2010 have the confidence to try for a higher price. We were expecting a drop of about 1%, as the majority of this month’s index falls in December, but the optimism of those early January sellers flipped it around. This is the busiest ever start to a new year on Rightmove,’ said Miles Shipside, Rightmove’s commercial director.
He said the factors that contributed to the real estate market’s recovery in 2009 looked to strengthen in the short term, despite an election less than five months away. ‘In spite of problems brewing for later in the year, there are definitely some of the ingredients for a buoyant spring, and a window of opportunity that sellers may wish to take advantage of,’ explained Shipside.
‘The impending election, a traditional dampener of market activity, is perhaps having less of a negative effect than usual on home-movers’ intentions,’ he added. But Rightmove said higher interest rates and government spending cutbacks later in the year could sap the market’s upward momentum.
London, which has led the country’s house price recovery, property asking prices rose 2.3% on the month and 5.5% on the year, the data also shows. Rightmove is forecasting that property prices in the capital could rise by 5% during 2010.
Early findings from the latest Rightmove Consumer Confidence Survey, to be released later this week, would seem to support this. The survey reveals that about 70% of those who intend to move in the coming year do not believe that the election will affect their plans. While their opinions may change when the details of any future government’s austerity package become clearer, at present there are favorable circumstances which appear to be over-riding such longer term concerns.
In particular for those who have so far held off selling, the early spring may be the best opportunity to take advantage of the benign conditions that started to emerge during 2009 in spite of the ongoing recession. These factors are still present and indeed show evidence of strengthening in sellers’ favor in the short term, according to Rightmove.
‘Within the shrunken housing market that has become the current norm, there are very active market segments where buyers and sellers who are able to proceed are getting together and are striking deals. While there are political and economic clouds on the horizon, there are signs that we are in for an active spring before the storm breaks later in the year,’ concluded Shipside.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.